Wallingford v. Home Mut. Fire & Marine Ins. Co.

• Decision Date: 31 March 1860
• Citation: 30 Mo. 46
• Parties: WALLINGFORD et al., Respondents, v. HOME MUTUAL FIRE AND MARINE INSURANCE COMPANY, Appellant.
• Court: Missouri Supreme Court

30 Mo. 46

WALLINGFORD et al., Respondents,

v.HOME MUTUAL FIRE AND MARINE INSURANCE COMPANY, Appellant.

Supreme Court of Missouri.

March Term, 1860.

1. In order that a policy of insurance may be binding upon the insurer, it must be accepted by the insured.

2. The charter of a mutual fire insurance company declared that the applicant for insurance “shall, before he receives his policy, deposit his promissory note, &c., a part not exceeding ten per cent. of which shall be immediately paid.” The by-laws provide that “policies shall take effect at 12 o'clock, noon, on the day of approval at the office of the company, and shall be binding thereafter, provided the premium or ten per cent. tax on the premium note has been paid,” and that “ten per cent. of the premium note shall be paid in all cases and endorsed on the policy.” Held, that the giving of the note and payment of the prescribed ten per cent. were conditions precedent to the taking effect of a policy.

Appeal from St. Louis Court of Common Pleas.

The facts in this case sufficiently appear in the opinion of the court. At the instance of the plaintiffs the court gave the jury the following instruction: “1. If the jury find from the evidence that the plaintiffs applied to the defendant for insurance on the property and for the sum set forth in the petition, and at the time executed their promissory note in blank to be filled up and retained by defendant for such sum of money as the said defendant should fix as the premium upon the insurance applied for; that the said defendant accepted said application, filled up said note for the premium and retained the same; that said defendant executed its policy in favor of the plaintiffs for the sum and on the property described in the petition, and that said policy was sent to defendant's agent at Weston for delivery to plaintiffs; that said policy was received by said agent for a reasonable length of time before the fire, and that plaintiffs, before the fire and after the receipt of said policy by said agent, applied to him for said policy and was willing and ready to pay such portion of said premium or per centage on the premium note as defendant might properly require; that the property mentioned in the petition was destroyed by fire as in said petition alleged, then they will find for plaintiffs in the sum claimed, less ten per cent. on the amount of the premium note.”

The court gave the following instructions at the instance of defendant: “2. The plaintiffs are not entitled to recover unless the jury believe from the evidence that plaintiffs accepted and consented to the rate and terms of insurance proposed by defendant before the fire. The acts and declarations of the plaintiffs and of the witness Bird after the fire are not competent evidence in this case and should be disregarded by the jury.”

The court, at the request of the jury for further instructions, gave the following: “3. If the application of the plaintiffs for insurance was sent to the defendant by its agent, and at the same time a blank premium note signed by the plaintiffs was sent to be filled up for such sum, or at such rate of insurance, as the defendant should fix; and if the application of the plaintiffs was accepted by the defendant, and the premium note was filled up by the defendant and the policy issued, then the plaintiffs were insured from the time the note was filled up and the policy issued, although it was not yet delivered to the plaintiffs. 4. By the instructions given at the instance of the defendant it is not intended by the court that the plaintiffs should have accepted the terms of the insurance subject to issuing of the policy.”

The court refused the instructions asked by the defendant.

Glover and B. A. Hill, for appellant.

I. The company is a mere creature of the charter and can only act in the mode pointed out. The charter and by-laws made the payment of ten per cent. of the premium note indispensable to the consummation of the contract. The company can not waive such condition. The conditions of the policy must be complied with. The authority of the agent, Bird, were limited to receiving and forwarding applications, delivering policies and receiving the per centage. There is no evidence that any officer of the company in St. Louis had notice through Bird or otherwise that plaintiffs agreed or proposed to take the policy at any rate the company might fix and be bound by such rate, and no notice to or agreement with Bird to that effect could bind the company. There never was any mutual agreement or assent or union of minds upon any rate or terms of insurance. There was error in giving the instruction as asked by plaintiffs, and in giving those given upon the court's own motion.

Biddlecome, for respondents.

I. It is not essential to the contract of insurance that a policy shall have been executed and delivered. (29 Maine, 51; 17 Ohio, 192; 9 How. 390.) The company may bind itself by a contract of insurance in the absence of a deposit of a premium note and payment. (20 Ohio, 529; 4 Cow. 645; 2 Curtis, 524; 1 Wash. C. C. 93.) Bird was not authorized by respondents to fill up their application with the rate of nine per cent. or any per cent. The demand for the policy, of which there was abundant testimony for the finding of the jury, the agreement of respondents with Bird to pay the rate fixed by the company, and the readiness of respondents to pay the sum demanded even before delivery of policy, are each and all most conclusive proof of an acceptance of the contract of insurance.

EWING, Judge, delivered the opinion of the court.

This was an action on a policy of insurance. The respondents were doing business in the city of Weston, Mo., in the firm name of Wallingford & Newman. The appellant was a Mutual Insurance Company, holding a charter from this state, and located and doing business in St. Louis.

By the eighth section of the charter it is declared that every person becoming a member of the company by effecting insurance therein shall, before he receives his policy, deposit his promissory note for such sum as shall be determined by the directors; a part, not exceeding ten per cent., of said note shall be immediately paid for the purpose of discharging incidental expenses, & c.; another provision of the charter provides that insurance shall be made on the written application of the assured. The by-laws make it the duty of the president, alone or jointly with any director, to examine all applications for insurance, fix the sum or sums to be taken on each, and the rates of insurance, and approve the same by endorsement on the back of the application; also that “policies of insurance shall take effect at 12 o'clock, noon, on the day of approval at the office of the company, and shall be binding thereafter, provided the premium or ten per centage on the premium note has been paid.” Sec. 8, article 4 of the by-laws further declares that ten per cent. of the premium note shall be paid in all cases and endorsed thereon; one dollar shall be paid to the secretary for each policy, and fifty cents for every assignment or transfer, and one dollar shall be allowed agents for each application taken by them, provided the same is affirmed; and the charter, amendment, by-laws, and conditions of insurance, annexed to the policy, and the application for insurance, are all by express terms made a part of the policy--all which, together with the policy and premium note, were read in evidence on the trial. Besides these, the evidence in the case consisted of the deposition of L. D. Bird, and Salisbury, the secretary of the company. Bird was the local agent of the company at Weston for receiving and forwarding applications for insurance; and to him the respondents made their application for insurance to the amount of twenty-two hundred dollars for six years on the property described in the petition. The application was filled up by Bird at the rate of nine per cent. premium for the six years, and a blank premium note was signed at the same time by respondents and delivered to Bird, who forwarded them to the company at St. Louis. It also appeared from the deposition of Bird that some time after they were sent down, and before the appellant would issue the policy, a resurvey of the property was required, which was made and forwarded; that the application was then acted upon by the president, who approved the risk at the rate of fifteen per cent. premium for six years; and on January 20, 1855, a policy was made out, signed and sent to the agent, Bird, with a letter explaining the reasons for fixing the rate so high, and directing that if the insured should think the rate too high,...